Ferring Pharm., Inc. v. Azar
Ferring Pharm., Inc. v. Azar
Opinion of the Court
DENYING PLAINTIFF'S MOTION TO ENFORCE JUDGMENT
I. INTRODUCTION
This case returns to this Court one year after the grant of summary judgment to Plaintiff Ferring Pharmaceuticals, Inc. ("Ferring") due to Defendant U.S. Food and Drug Administration's ("the FDA") surprise change of position regarding the chemical classification of a molecule within Plaintiff's colon cleansing drug, Prepopik. For years, Ferring and the FDA have agreed that picosulfate is the active moiety
Ferring now challenges this determination as a violation of the Court's grant of summary judgment and remand to the agency, and requests that this Court order the "FDA to recognize NCE exclusivity of Prepopik, in keeping with the positions the agency has taken repeatedly throughout the regulatory process and ensuing litigation." Mem. P. & A. Supp. Pl.'s Mot. Enforce J. ("Pl.'s Mem.") at 17, ECF No. 64-1. For the reasons set forth below, the Court denies Ferring's motion to enforce the judgment.
II. FACTUAL AND PROCEDURAL BACKGROUND
Prepopik, a fixed-combination drug product used to cleanse the colon prior to colonoscopies, contains three active ingredients: sodium picosulfate, magnesium oxide, and anhydrous citric acid. A.R. 4, ECF No. 20-3. "Fixed-combinations are drug products that generally include two or more drug substances (active ingredients) in a fixed ratio, synthetically combined into a single dosage form." A.R. 200, ECF No. 20-4. While magnesium oxide and anhydrous citric acid had already been approved in previous New Drug Applications ("NDA") when Ferring submitted its NDA for Prepopik, sodium picosulfate had not been. Therefore, when it submitted its NDA for Prepopik, Ferring also sought five years of exclusivity for the drug as a New Chemical Entity
The FDA approved Ferring's NDA for Prepopik in 2012. A.R. 201. However, the agency refused to grant Ferring five years of exclusivity for Prepopik because two of the active ingredients in the drug (magnesium oxide and anhydrous citric acid) existed in drugs previously approved by the FDA.
[i]f a drug product that contains a new chemical entity was approved after September 24, 1984, in an NDA submitted under section 505(b) of the [A]ct, no person may submit a 505(b)(2) application or ANDA under section 505(j) of the [A]ct for a drug product that contains the same active moiety as in the new chemical entity for a period of 5 years from the date of approval of the first approved NDA ....
Ferring submitted a Citizen Petition requesting that the FDA change its exclusivity determination for Prepopik. A.R. 64. A year later, the FDA issued a response to this Citizen Petition and Citizen Petitions filed by two other pharmaceutical companies whose respective fixed-combination drug products had also been denied five-year exclusivity. A.R. 199. The FDA's response stated that it believed that its then-current interpretation of the relevant statute and regulations-that fixed-combination drugs that contain at least one previously approved active moiety cannot be granted exclusivity, even if the drug also contains at least one new active moiety-was "permissible." A.R. 212. However, it acknowledged that its existing interpretation "may result in drug development strategies that are suboptimal from a public health perspective" because, when sponsors submit two NDAs-one for a drug with a single active-ingredient containing the new active moiety and another for a fixed-combination product-"undue importance" may be placed on "the order in which these two NDAs are approved." A.R. 213-14. Therefore, the FDA agreed to consider altering its interpretation of the law, issuing a draft guidance and seeking public comment on a new interpretation of existing law and regulation that would "recognize 5-year NCE exclusivity for a drug substance that does not contain a previously approved active moiety, even where such a drug substance is approved in a fixed-combination with another drug substance that contains at least one previously approved active moiety." A.R. 214.
Despite the fact that Prepopik met this new standard, the FDA refused to grant it five years of exclusivity because "[e]xclusivity runs from the date of approval of the product" and the agency's old interpretation had been in effect on the date Prepopik's NDA had been approved. A.R. 215. After filing a Petition for Reconsideration and Petition for Stay, which the FDA denied, Ferring filed this action in federal court, alleging that the FDA's denial of its application was contrary to the Food, Drug, and Cosmetic Act,
On first review, the Court denied Ferring all of the relief it requested. See gen erally *172Ferring Pharm. Inc. v. Burwell ("Ferring I "),
Following the Court's grant of summary judgment to the FDA, Ferring moved for reconsideration on the grounds that it could identify several examples of a single-entity drug substance being denied five-year exclusivity due to the order in which the NDAs for drugs that include that substance were approved. See Mem. P. & A. Supp. Pl.'s Mot. Recons. ("Pl.'s Mot. Recons. Mem.") at 1-3, ECF No. 39-1. The Court granted the motion for reconsideration, entered summary judgment for Ferring, and "remand[ed] th[e] action to FDA for further proceedings not inconsistent with [its] opinion." Ferring Pharm., Inc. v. Burwell ("Ferring II "), No. 15-802,
It is the result of this remand that Ferring now challenges. Throughout the NDA process, the NCE exclusivity Citizen Petition process, and this litigation, the FDA has consistently agreed with Ferring that the active moiety in sodium picosulfate is picosulfate. For example, when Ferring submitted its NDA for Prepopik, the FDA classified the NDA as a "Type 1-New Molecular Entity" submission. See FDA, Drugs@FDA: FDA Approved Drug Products, Prepopik (NDA 202535), https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm. The term "new molecular entity" is not defined by statute or regulation, but the FDA defines the term as "an active ingredient that contains no active moiety that has been previously approved by [the FDA] in an [NDA] or has been previously marketed as a drug in the United States." See FDA, Drugs@FDA Glossary, https://www.fda.gov/drugs/informationondrugs/ucm079436.htm. Implied in that classification is the determination that sodium picosulfate contains an active moiety that had not previously been approved because magnesium oxide and anhydrous citric acid contain active moieties that had already been approved. Throughout the course of this litigation, the FDA never altered its determination that sodium picosulfate contains a not previously approved active moiety-until now.
Eight months after the Court remanded this matter back to the FDA for further proceedings consistent with its arbitrary and capriciousness finding, the FDA changed its mind regarding the identity of the active moiety in sodium picosulfate. It now believes, upon "further review," that the active moiety in sodium picosulfate is not picosulfate, but rather BPHM, an active moiety that is also found in other previously approved drug products. Ex. B
*173at 2, Pl.'s Mot., ECF No. 64-3. As such, it concluded that Prepopik was not entitled to five-year NCE exclusivity. Ex. D at 8-9, Pl.'s Mot.
The agency's change in position is based in its new chemical analysis of picosulfate. Following its review of Ferring's application for five-year NCE exclusivity, it explained that "[a]t the time the Prepopik application was submitted, the Agency determined that sodium picosulfate was [an NME]. It was believed that picosulfate was the active moiety of the drug substance sodium picosulfate, and that this active moiety had not been previously approved by FDA." Id. at 7.
The agency has given no indication of why this determination was made. It admits that "[i]t is not clear from the administrative record how the Agency determined that sodium picosulfate was considered to be an NME, as no documentation of a structural analysis of this active ingredient has been found." Id.
Now the FDA explains that, following the Court's remand, it has taken a closer look at the chemical properties of sodium picosulfate and "determined that sodium picosulfate is the di-sodium salt of a di-sulfate derivative of [BPHM]," because "[a]fter excluding the salt and ester portions of sodium picosulfate, as FDA's regulations require, what remains is BPHM." Ex. D at 7, Pl.'s Mot. "Amongst chemists, there is a long standing understanding that esters are substances resulting from the splitting-out of water from the combining of an alcohol, and an acid, where the acid may be organic (e.g. acetic acid) or inorganic (e.g. sulfuric acid)." App. A at 4, Ex. 1, Defs.' Opp'n. After performing a "virtual hydrolysis to cleave all ester bonds," and "[e]xamin[ing] the alcohol and acid components" to "determine which are 'responsible for the physiological or pharmacological action of the drug substance,' " the FDA determined that the active moiety in sodium picosulfate is BPHM. Id. at 11-12. It therefore concluded that "[d]espite [its] prior statements that sodium picosulfate was an NME and an NCE, it is now evident that those statements were incorrect because this drug substance contained a previously approved active moiety when it was approved in Prepopik." Ex. D at 8, Pl.'s Mot.
Ferring does not accept this conclusion, claiming that it resulted from a mid-adjudication change in the interpretation of the term "ester" to include "covalently bound sulfur-based appendages." Ex. C at 2, Pl.'s Mot., ECF No. 64-4. It argues that if the agency wanted to change its interpretation of the term "ester," it should have followed the appropriate administrative procedures. Id. According to Ferring, the FDA's "sudden reversal is not just an unreasonable *174break with past practice," but also "an end-run around this Court's" grant of summary judgment and remand order. Pl.'s Mem. at 2. Therefore, it has filed a motion to enforce the Court's prior judgment, requesting that the Court "order FDA to award NCE exclusivity to Prepopik instead of ordering another remand." Id. at 16. The motion is now ripe for decision.
III. LEGAL STANDARD
"Within a court's power to administer its decrees is the power to construe and interpret the language of the judgment." Heartland Hosp. v. Thompson ,
"When a district court reverses agency action and determines that the agency acted unlawfully, ... the appropriate course is simply to identify a legal error and then remand to the agency, because the role of the district court in such situations is to act as an appellate tribunal." N. Air Cargo v. U.S. Postal Serv. ,
IV. ANALYSIS
In order for Ferring to succeed on its motion to enforce the Court's prior judgment, it must demonstrate that the FDA did not comply with the Court's order. Therefore, the Court must first determine the scope of its prior order. See Heartland ,
However, Ferring still believes that FDA's change in position "violates both the letter and spirit of this Court's Order" because the FDA, as well as the Court, had never questioned whether sodium picosulfate contained an active moiety that the FDA had not previously approved. Pl.'s Mem. at 6. And because Ferring, it would seem, relied on the FDA's assumption regarding the non-approval status of sodium picosulfate's active moiety, it believes that the FDA should not be allowed to issue its surprise denial of exclusivity at this late hour. See id. at 12. Ferring therefore argues that the FDA's change in position regarding sodium picosulfate's prior approval status violates the law of the case; that the agency is judicially estopped from changing its position in this manner; that the agency's eleventh hour chemical analysis of sodium picosulfate impermissibly retroactively applies a new interpretation of the term "ester" and violates due process; and that the agency's actions are arbitrary and capricious. See id. at 7-15. For the reasons set forth below, the Court finds that the FDA's actions on remand do not violate the law of the case and that the FDA is not judicially estopped from asserting its change in position concerning sodium picosulfate's prior approval status. The Court also finds that Ferring's arguments regarding retroactivity, due process, and arbitrary and capriciousness are not suitable for consideration within the context of a motion to enforce judgment.
A. Law of the Case
Ferring's first argument is that the FDA's change in position regarding the active moiety in sodium picosulfate violates the law of the case doctrine because the FDA's actions on remand "undermine the clear thrust of this Court's order instructing FDA to take further proceedings consistent with the Court's memorandum opinion. " Pl.'s Mem. at 8 (internal quotation marks and citation omitted) (emphasis in original). According to Ferring, the "FDA's latest flip-flops, changing its positions on the identity of the active moiety in sodium picosulfate and whether the active ingredient itself is novel, simply came too late in the day." Id. at 7. The FDA counters that "[t]he doctrine of law of the case is inapplicable here because the factual issue of whether sodium picosulfate contains a new active moiety was never raised as a disputed issue to be decided during the litigation and FDA's actions on remand were fully within the scope of the Court's mandate." Defs.' Opp'n at 6, ECF No. 66. The FDA is correct that its determination regarding the active moiety in sodium picosulfate cannot be bound by the law of the case doctrine, though not, as it suggests, because the parties never disputed the issue.
" 'Law-of-the-case doctrine' refers to a family of rules embodying the general concept that a court involved in later phases of a lawsuit should not re-open questions decided (i.e., established as the law of the case) by that court or a higher one in earlier phases." Crocker v. Piedmont Aviation, Inc. ,
*176Quern v. Jordan ,
At a basic level, Ferring's argument that the law of the case applies here must fail because the Court never actually found that the active moiety in sodium picosulfate is picosulfate, either explicitly or by necessary implication. Indeed, in neither of its two prior memorandum opinions did the Court even repeat the parties' belief that the active moiety in sodium picosulfate was the not-previously-approved picosulfate. The closest the Court ever came to such a pronouncement was during its description of Ferring's actions during the NDA and NCE exclusivity application processes, when it explained that "[b]ecause sodium picosulfate constituted a new drug substance, Ferring sought five-year exclusivity for PREPOPIK when it submitted its NDA." Ferring II ,
The Court never found or stated that picosulfate is the active moiety in sodium picosulfate because the identity of that moiety was irrelevant to the Court's analysis of the agency's interpretation of the NCE exclusivity provisions. Ferring argues that the parties' assumption regarding the active moiety cannot now be revisited because otherwise, "[t]he issue before the Court in this case-the propriety of FDA's original interpretation of the NCE exclusivity statute as applied to fixed-dose combination products-would have been wholly academic if sodium picosulfate were not, in fact, a novel active ingredient." Pl.'s Mem. at 6. Therefore, Ferring argues, it can be inferred that the Court found that the active moiety in sodium picosulfate had not already been approved. But that is not so.
If the FDA had indeed already informed Ferring that BPHM was the active moiety in sodium picosulfate, and had denied Ferring's application for five-year NCE exclusivity based on both its active moiety determination and its application of its prior interpretation of the NCE exclusivity provisions to Prepopik, and Ferring believed that it had legitimate challenges to both grounds of denial, and indeed then challenged both, Ferring's challenge of the FDA's use of its prior interpretation of the exclusivity provisions would have been far from academic.
Despite the fact that the law of the case doctrine clearly does not apply to something the Court never addressed, even tangentially, and which, even if it had been tangentially addressed, would have been dicta because such a finding would not have been essential to its holding, see Singleton ,
Ferring is correct that an issue need not be disputed to become the law of the case. However, neither of the cases it cites stands for the proposition that issues that have not actually been decided, even implicitly, may become the law of the case. In Belizan , the Circuit Court refused to revisit, during the case's second appeal, the district court's affirmative determination that a set of facts did not sufficiently state a claim under a particular act, when that determination had not been challenged during the plaintiffs' first appeal to the circuit. See Belizan ,
B. Judicial Estoppel
Ferring also argues that the FDA's switch in position regarding the active moiety in sodium picosulfate is barred by judicial estoppel, which "prevents parties from abusing the legal system by taking a position in one legal proceeding that is inconsistent with a position taken in a later proceeding." Pl.'s Mem. at 8 (citing Moses v. Howard Univ. Hosp. ,
"[W]here a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him." Maine ,
Ferring claims that the FDA's actions "check[ ] all three of these boxes." See Pl.'s Mem. at 9. However, by the Court's count, it only checks one. While the FDA has indeed asserted "clearly inconsistent" positions with respect to its view of whether picosulfate is the active moiety in sodium picosulfate, it is not the case that the FDA "succeeded in persuading the court to accept [its] earlier position." Pl.'s Reply at 9. Indeed, the FDA never made any effort to persuade the Court of the identity of the active moiety in sodium picosulfate. Instead, the FDA took its earlier statements that the active moiety of sodium picosulfate was picosulfate during the NDA process, assumed those statements were correct, and also assumed, at that time, that *179those statements would be applicable to the NCE process. The Court never mentioned, nor questioned, this assumption, not because it had been persuaded, but because the question concerning sodium picosulfate's active moiety did not need to be decided to resolve the issues before it.
There is no doubt that Ferring is inconvenienced by the FDA's new position that the active moiety in sodium picosulfate can be found in other, previously approved active ingredients. Indeed, had Ferring known that the FDA would argue that the active moiety in sodium picosulfate was BPHM rather than picosulfate, it may have decided not to pursue this litigation in the first place. At the very least, this revelation is a setback. However, this change in position certainly did not give the FDA an unfair advantage throughout the course of this litigation. Indeed, had the FDA staked out this position at the outset, it may have avoided litigating two dispositive motions regarding its prior interpretation of the NCE statutory and regulatory provisions, depending on how Ferring had chosen to respond.
Because the FDA's actions do not meet the three criteria set forth in Maine , and because it appears that the FDA's late change in position may have been due to inadvertence or mistake, the Court does not find that the FDA is judicially estopped from determining that the active moiety in sodium picosulfate is BPHM, thereby denying Prepopik five years of exclusivity. Accordingly, the Court cannot grant Ferring the relief it seeks on this basis either.
C. Other Challenges to the Agency's Actions on Remand
Ferring also asserts that the process through which the FDA determined that the active moiety in sodium picosulfate is BPHM was defective. First, it contends that the agency's decision that sodium picosulfate contained an ester amounts to retroactive rulemaking because it "adopt[ed] a new, industry-wide interpretation of a statutory term in the context of an adjudication and then appl[ied] it retroactively" to Prepopik. Pl.'s Mem. at 10-11. Second, it argues that this change in interpretation violates the Due Process Clause of the Fifth Amendment to the United *180State Constitution because the agency did not provide Ferring with "notice and some kind of hearing before final deprivation of a property interest."
In support of its position that Ferring's merits arguments concerning the agency's decision on remand are not properly raised in a motion to enforce the prior judgment, the FDA cites Heartland Reg'l Med. Ctr. v. Leavitt ,
In response to the results of that remand, the plaintiff hospital filed a motion to enforce the court's previous order, seeking a declaratory judgment that it qualified for the reimbursement as well as an award of the reimbursement itself, and also filed a separate APA challenge to the agency's actions on remand.
Ferring attempts to distinguish this case from Heartland by pointing out that the Court's order in this case "rel[ied] on all parties' shared understanding that sodium picosulfate contained a novel active moiety." Pl.'s Reply at 12. However, as explained above, the Court did not "rely" on the parties' shared understanding that picosulfate was the active moiety in sodium picosulfate in reaching its decision, but rather focused on the issue presented to it:
*181whether the application of the FDA's original interpretation of the NCE five-year exclusivity provision to Prepopik was arbitrary and capricious, violating the APA. The identity of the active moiety in sodium picosulfate was not essential to the Court's reasoning in reaching its decision, nor was it actually decided by the Court. Accordingly, although this remand gave Ferring the right to have its application adjudicated without the application of a particular arbitrary and capricious rule, it did not dictate a result in Ferring's favor. Nor did it constrain the FDA's decisionmaking process beyond the non-application of the rule that the Court had deemed arbitrary and capricious. On remand, agencies are permitted to come to the same conclusions as they had come to in the first instance, as long as they come to those conclusions for permissible reasons. See Fed. Election Comm'n v. Akins ,
V. CONCLUSION
For the foregoing reasons, Ferring's Motion to Enforce Judgment (ECF No. 64) is DENIED . An order consistent with this Memorandum Opinion is separately and contemporaneously issued.
An "[a]ctive moiety is the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance."
A "new chemical entity" is "a drug that contains no active moiety that has been approved by the FDA in any other NDA submitted under section 505(b) of the [A]ct."
Section 505(b)(2) NDAs are applications in which some or all of the investigations relied upon to show that the drug is safe and effective "were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted."
The agency explained that while Prepopik was explicitly described as an NME in its tertiary Chemistry Review and primary Clinical Pharmacology Review, this classification was not discussed in the primary Chemistry, Manufacturing and Controls review. App. A at 3, Ex. 1, Defs.' Opp'n, ECF No. 66-1. The agency believes that the dearth of explanation regarding Prepopik's NME status was likely due to the fact that in 2012, the agency had not yet developed a standard process for determining and documenting NME status.
In order to prevail in such a challenge to a denial of exclusivity, Ferring would have had to prevail on both arguments-i.e., that the FDA had erred both in its determination concerning the active moiety in sodium picosulfate and in its interpretations of the NCE exclusivity provisions. Thus, the matter would only have been academic if Ferring had not prevailed on the moiety issue and the Court, in its discretion, had decided not to also reach the exclusivity interpretation issue.
Of course, such a finding, if made in a clearly erroneous or arbitrary and capricious manner, could be subject to review under the APA, though not through a motion to enforce a prior judgment that dealt with an entirely separate question. See discussion infra Section IV.C.
Granted, if the FDA had denied exclusivity both because of its interpretation of the NCE provisions and because it believed the active moiety in sodium picosulfate is BPHM, and the Court had upheld the FDA's decision regarding the active moiety in sodium picosulfate, the Court may not have had to reach the regulatory argument. But these are alternate arguments that do not depend on each other.
And if the FDA had prevailed on the moiety issue, it could have avoided this Court's finding that its prior interpretation of the NCE exclusivity provisions was arbitrary and capricious, which led to it having to grant exclusivity to new drugs from applicants that had not challenged the FDA's interpretation before this Court. See Pl.'s Mem. at 2 n.1.
Reference
- Full Case Name
- FERRING PHARMACEUTICALS, INC. v. Alex AZAR, in his official capacity as Secretary, United States Department of Health and Human Services, and Scott Gottlieb, in his official capacity as Commissioner of the Food and Drug Administration
- Cited By
- 2 cases
- Status
- Published